FLORIDA LAW WEEKLY

VOLUME 43, NUMBER 27

CASES FROM THE WEEK OF JULY 6, 2018

THE FLORIDA SUPREME COURT RULES THAT AHCA MAY ONLY ASSERT A LIEN ON THE PAST MEDICAL EXPENSES PORTION OF A VICTIM’S TORT RECOVERY TO SATISFY ITS MEDICAID LIEN.

Giraldo v. Agency for Health Care Administration, 43 Fla. L. Weekly S279 (Fla. 2nd DCA Jul 5, 2018):

The supreme court reviewed two cases on conflict, regarding whether the Agency for Health Care Administration (AHCA) may assert a lien on the future medical expenses portion of a Florida Medicaid recipient’s tort recovery.

In Giraldo, a young many suffered significant injuries in an ATV accident. The Florida Medicaid program had paid over $300,000 for his medical care. The plaintiff later settled with one of the multiple alleged tortfeasors for $1 million (claims against other tortfeasors were still pending).

Using the formula outlined in section 409.910(11)(f), Florida Statutes (2015), AHCA calculated that the appropriate amount of its lien was $321,720.16 and asserted a lien in that amount against the settlement.

However, section 409.910(17)(b) additionally authorizes Medicaid recipients to contest the amount of a Medicaid lien at a hearing before the Department of Administrative Hearings (DOAH), by providing that a lesser portion of the total recovery should be allocated for reimbursement for past and future medical expenses than the amount calculated by the agency.

At the DOAH hearing, the plaintiff presented uncontested expert testimony establishing that only $13,881.79 of the million dollar tort recovery represented compensation for the man’s past “medical expenses,” and plaintiff further argued that the AHCA lien should have been limited to that amount.

AHCA agreed that the plaintiff who had the burden of rebutting the lien amount derived from the statutory formula, put on no evidence to show that the lien exceeded the amount properly allocated to his anticipated future medical expenses, and thus it argued it should recover the full amount of the lien.

In examining the plain language of the Federal Medicaid Act, the court pointed to that section where the “ceiling” on what portion of a recipient’s tort recovery the state can take a lien, the court construed the language to be restricted to past medical expenses. See, 42 U.S.C. § 1396a(a)(25)(H). The court said it saw no reasonable way to read the language in that section as giving states a right to a portion of tort recovery from which the injured party would be expected to pay his or her anticipated medical expenses in the future, without aid from the government.

The majority view is that the Medicaid lien does not attach settlement funds allocable to future medical expenses, and a reading of the act is consistent with that view. The supreme court then concluded that the plain language of the Medicaid Act limited Florida’s assignment rights (and lien) to settlement funds fairly allocable to past medical expenses, without further analysis.

Instead of remanding for an additional hearing, because the court held that the federal Medicaid Act prohibited AHCA from placing a lien the future medical expenses portion of the Medicaid recipient’s tort recovery, it remanded with instructions that the ALJ reduce the AHCA lien amount to the $13,881.79 as introduced at the hearing.

Noting that fact finders may reject “uncontradicted testimony,” there still must be a reasonable basis in the evidence for the rejection. Because the plaintiff presented uncontradicted evidence establishing that the $13,881.79 was the settlement portion properly allocated to his past medical expenses, there was no basis in the record for the court to reject that evidence, thereby obviating the need for any further fact finding.

ERROR TO ENTER SUMMARY JUDGMENT FOR DEFENDANT WHEN HEAVY TRAILER HITCH FROM AN UPPER SHELF FELL AND STRUCK THE PLAINTIFF-THERE WERE FACTUAL ISSUES EXISTED AS TO WHETHER THE DEFENDANT HAD ACTUAL OR CONSTRUCTIVE KNOWLEDGE, AND WHETHER DEFENDANT CREATED A DANGEROUS CONDITION THROUGHT ITS MODE OF OPERATION.

Khorran v. Harbor Freight Tools USA, 43 Fla. L. Weekly D1452 (Fla. 3rd DCA June 27, 2018):

A man was shopping at a Harbor Freight store, and while he was perusing the shelves, a large metal object fell off an upper shelf and struck him from behind injuring his knee. He was facing a wall of shelves when the item behind him, fell and struck him.

Plaintiff sued for both negligence, and negligent mode of operation. Both claims were based in part on allegations that the large and heavy equipment at issue, was displayed in an unsafe manner over areas where invitees traversed.

The plaintiff testified at his deposition that he did not see the object on the shelf before the incident, nor did he see it on the ground after it hit him. He did testify, however, that he saw the object in his peripheral vision as it was falling.

Plaintiff also testified that while he was being attended to after the incident, a store employee showed him a metal trailer hitch and identified the hitch as the object that struck him. Though the store asserts that its policy is to display such heavy objects only on lower shelves, the plaintiff testified that immediately after the incident he saw trailer hitches being stored on the top shelf in question at a height of at least 8 or 9 feet off the ground.

The defendant sought summary judgment arguing that there was no evidence as to where the trailer hitch was located at the time of the incident, that the defendant created the dangerous condition, or that the defendant had actual constructive notice of it. Harbor Freight produced an expert affidavit opining that the plaintiff’s version of events was a “physical impossibility.”

The plaintiff filed his own expert affidavit opining that his version of events was reasonable, and in response, argued that he was entitled to a res ipsa loquitur inference, rendering any actual constructive notice issue irrelevant.

A property owner owes an invitee a duty to use reasonable care and maintain the property in a reasonably safe condition. When an invitee is injured by a dangerous condition on a business premises, or seeks to recover damages from the premises owner, the invitee must establish that the premises owner either had actual constructive notice or notice of the dangerous condition. Constructive knowledge may be inferred if the dangerous condition existed for such a length of time that in the exercise of ordinary care, the premises owner should have known of it and taken action to remedy it.

The plaintiff testified that there were two employees stacking shelves behind him in the same aisle where he was standing, that he saw the object that hit him fall from above and behind his head, that the employees who had been stacking the shelves behind him identified the trailer hitch as the object that struck him, that immediately following the incident the plaintiff looked up from where he was seated and saw multiple trailer hitches sitting on the top shelf directly above where he had been standing, and that the top shelf was at least 8 or 9 feet high requiring the use of a ladder.

Viewing that evidence in a light most favorable to the plaintiff, the court found that there were factual issues that prevented summary judgment.

Additionally, on the plaintiff’s negligent mode of operation claim, fact issues preclude summary judgment.

A claim for negligent mode of operation recognizes the common sense proposition of negligence of law, that the duty of care required under the circumstances may consist of taking reasonable precautions so as to minimize or eliminate the likelihood of a dangerous condition arising in the first instance. Under that theory, though, the focus is on the matter in which the premises owner operates, rather than on the particular events surrounding the plaintiff’s accident.

If the premises owner operates in a manner that creates a dangerous or unsafe condition, the premises owner can be held liable. Notably, under the mode of operation theory of negligence, the requirement of establishing constructive notice is altered or eliminated.

In this case, a defendant’s employee testified in his deposition that when the defendant receives a shipment of trailer hitches, an employee removes them from the boxes they are shipped in and stacks them loosely on the store’s shelves. The defendant also reduced evidence that it has a policy of displaying and does display heavy metal objects on lower shelves yet at his deposition, plaintiff testified that he saw several metal trailer hitches stored on the top shelf at a height of 8 or 9 feet.

Under Florida law, the question of whether a business entity was negligent in stacking items on a shelf at a particular height, in a particular manner, and at a particular location, causing a dangerous condition to exist is a jury question. Simply put, the court found it could not conclude based on de novo review, that the defendant met its burden of establishing the absence of any genuine issue of material fact with regard to a negligent mode of operation claim either, and thus the court reversed the summary judgment entered for the defendant.

GENERALLY NEED TO HAVE A TRANSCRIPT TO CHALLENGE THE AMOUNT OF ATTORNEY’S FEES AWARDED BY THE COURT.

Myret, LLC v. Group LX, Inc., 43 Fla. L. Weekly D1453 (Fla. 3rd DCA June 27, 2018):

The party appealed a final judgment along with the trial court’s order determining that its opponent was both entitled to attorney’s fees, and setting the amount of those fees. In the appeal, the party disputed the amount of fees awarded. However, there was no transcript of the hearing where the fees were addressed.

The court ruled that without a transcript, it would have to affirm the ruling unless it found that the judgment was fundamentally erroneous on its face (which it did not).

ARBITRATION CLAUSE IN ATTORNEY’S RETAINER AGREEMENT UNENFORCEABLE FOR VIOLATING BAR RULES--THE PORTION OF THE ARBITRATION CLAUSE REQUIRING MANDATORY ARBITRATION OF FEE DISPUTES WAS INEXTRICABLY INTERTWINED WITH THE PORTION REQUIRING ARBITRATION AND THUS, THE TRIAL COURT ERRED IN DISMISSING THE COMPLAINT BASED ON THE ARBITRATION CLAUSE.

Owens v. Corrigan, 43 Fla. L. Weekly D1461 (Fla. 4th DCA June 27, 2018):

The plaintiff sued her attorneys in a three-count legal malpractice action alleging that defendants negligently represented her in a dependency case, causing her to lose custody of her children.

The defendants moved to dismiss the complaint, asserting that the plaintiff had signed a retainer agreement requiring her to submit the dispute to binding arbitration. The retainer agreement referenced the rules regulating the Florida Bar, and noted that the client agreed was agreeing to arbitration and relinquishing her right to bring an action in court (that portion was in all CAPS).

The plaintiff argued the arbitration clause was vague and ambiguous because the phrase “performance of legal services” was included within a reference to fees and charges, and because the arbitration clause stated that arbitration would be in accordance with the fee arbitration rule.

Additionally, the plaintiff argued that the arbitration clause was unenforceable, because the retainer agreement did not comply with Rule 4-1.5(i), which prohibits lawyers from making an agreement with clients for mandatory arbitration without advising the client in writing that the client should consider obtaining independent legal advice.

The trial court dismissed the plaintiff’s complaint, agreeing with the erroneous concession by plaintiff’s counsel that the fee arbitration program allowed arbitration of legal malpractice claims, and finding that Chapter 14 in the Florida Bar Rules addressed arbitration of all fees and grievances.

The plaintiff moved for rehearing, arguing that Chapter 14 was limited to disputes over entitlement or amount of fees, and leaving the plaintiff with the Florida judicial system as her only available forum.

Plaintiff argued that the arbitration provision in the agreement was not valid because it violated Rule 4-1.5(i). The Fourth District agreed. It found that that provision prohibits lawyers from making an agreement with a client prospectively provided for mandatory arbitration of fee disputes without advising the client in writing that the client should consider obtaining independent legal advice. That did not occur in this case.

The Fourth District rejected defendants’ argument that the rule did not apply because the case did not involve a fee dispute. Even though the arbitration clause could be read as requiring an arbitration of matters in addition to fee disputes, that did not alter the fact that the arbitration clause clearly violated the rule by prospectively providing for mandatory arbitration of fee disputes without giving the required warning language. The court said that was enough to invalidate the arbitration clause in its entirety.

The court also declined to sever that portion of the arbitration clause providing for mandatory arbitration of fee disputes, finding it to be inextricably intertwined with the portion requiring arbitration of disputes concerning the performance of legal services. Stated another way, an attorney’s entitlement to recover fees depends in large part upon the competence of the attorney’s performance.

The court held the arbitration clause was unenforceable, and remanded for further proceedings in court.

TRIAL COURT ABUSED ITS DISCRETION IN DENYING A CAUSE CHALLENGE OF A PROSPECTIVE JUROR WHO STATED SHE COULD NOT HOLD AN EMPLOYER VICARIOUSLY LIABLE FOR THE NEGLIGENCE OF AN EMPLOYEE--NEW TRIAL REQUIRED WHERE DENIAL RESULTED IN SEATING OF THE BIASED JUROR.

Lopez v. Y.O. Roofing and Associates, 43 Fla. L. Weekly D1473 (Fla. 4th DCA June 27, 2018):

Plaintiff was involved in an automobile crash with an employee of the defendant who was driving a company truck. Plaintiff sued the employee for his negligent operation of the vehicle, and sued the employer based on theories of vicarious liability in Florida’s dangerous instrumentality doctrine. During the litigation, the employee died, and the parties agreed to proceed against the defendant employer only.

During jury selection, the parties questioned one of the jurors who was a retired secretary for a carpet company. She was asked if she could render a verdict against a company whose employee was negligent, as opposed to a verdict against the employee himself.

The prospective juror then asked the attorney whether the employee was drinking, doing drugs or had a heart attack, and if not, why would the employer be responsible for him or her. The plaintiff’s counsel told the juror to assume that it was a “he said, she said” situation or a true “accident.” Plaintiff’s counsel then asked whether if there was a preponderance of evidence showing the employee was at fault, that the jurors could render a verdict knowing it would be against the employer. The juror responded that she did not think so.

The plaintiff challenged this juror for cause, articulating a difficulty in following the law with respect to rendering a verdict against the employer for the negligence of the employee. After the judge and the defense attorney both said they had “missed” that answer that the juror gave when plaintiff’s counsel raised it, the court denied the challenge without further inquiry. Because the plaintiff had already exhausted her other challenges and the court refused to give her an additional peremptory challenge when requested, the objectionable juror sat on the jury.

The Fourth District reiterated that if there is a reasonable doubt about a juror’s impartiality, that juror should be dismissed for cause. Additionally, new trials are required where the trial court denies a challenge for cause based on a juror’s equivocal or conditional responses that are not rehabilitated, or when reasonable doubt exists as to whether a juror possesses the requisite state of mind necessary to render an impartial decision.

In this case, the juror expressed her inability to render a verdict against an employer when the employee was at fault and within the scope of his employment. In other words, she could not find the employer to be vicariously liable, which was the sole ground of liability. There was no question that this juror expressed bias, and at the very least the court said there was reasonable doubt about whether the juror could render an impartial decision.

The appellate court also admonished that this juror’s bias was clearly evident. The court stated that once the trial judge was confronted with the juror’s answers in the transcript, which had been included in the plaintiff’s motion for new trial, the court should have granted the new trial based on its original mistake in failing to grant the cause challenge.